Case 3 (adapted from Trevino and Nelson, 2017)

You work as the recall coordinator for an automobile company that is tasked with developing a new car for the small car market in two years. Due to this relatively small and ambitious timeframe, design, engineering, and safety checks are done in parallel. Crash testing of this new car reveals that the fuel tank ruptures frequently during rear-end impacts of around 30 miles per hour. However, by the time this problem is identified, design and other stages of development have already been completed.

This design nevertheless meets the current industry standards. New standards have been written, requiring higher standards of safety for cars, but these have not officially been adopted yet. The company decides to market this car to a lower-income market, and thus to sell it at as low a price as possible, with the result being that less money can be spent on improving the gas tank. A controversial cost-benefit analysis undertaken by the company suggests that it would not be cost-effective to change the design at this late stage, despite the likely lives that would be saved. Ultimately, this unsafe design results in several fatal accidents and loss of life.

Questions:

  1. Please comment on the ethical culture at this automobile company, and how you would go about changing it.
  2. What are the relevant community standards that should guide you in this situation?
  3. How might the media treat the decision to recall the automobile or not recall the automobile? How might shareholders treat each of these decisions?
  4. As the recall coordinator for this automobile company, please outline how you would follow each of the 8 steps to sound ethical decision making in this situation.

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